Question

Distinguish between:

1. Goods and Assets

2. Expense and Loss

Answer 1

1. Goods and Assets:

• Goods refer to things in which the trader deals. But assets refers to things with which the trader deals.
• Goods are meant for resale, while assets are kept in the business permanently with the help of which the business is carried on.

2. Expense and Loss:

• Costs incurred by a business in the process of earning revenue are known as expense.
• The excess of expenses of a period over its related revenues is termed as loss. It decreases in owner’s equity.